Selected National Programmes and Projects
aimed at SE4 ALL
By
Debarshi Gupta
Research Associate, WISE
SE4 ALL Initiative
‘Sustainable Energy for All’ initiative was launched during UN
General Assembly in September 2011
The aim is to catalyze action around three clear objectives to be
achieved by 2030
Ensuring universal access to modern energy services.
Doubling the global rate of improvement in energy efficiency.
Doubling the share of renewable energy in the global energy mix
The Global Action Agenda chart out for achieving SE4 ALL initative identifies eleven action areas to achieve three objectives
Each of the above seven action areas support one or more of the three objectives of SE4 All initiative .
The four enabling action areas include cross cutting mechanisms that support the sectoral action areas at the country, local and regional levels.
Country: The Democratic Socialist Republic of Sri Lanka
The Energy Service Delivery (ESD) Project - (1997-2002)
The Renewable Energy for Rural Economic Development Project (RERED) - (2002-2011)
Distributed Electricity Solutions
Project Highlights
The ESD program was implemented from1997 to 2002 by the Government of Sri Lanka, with assistance from the International Development Association (IDA) of WB and the Global Environment Facility (GEF).
ESD was succeeded by RERED – 2002 to 2011.
Objective : To improve quality of life and bring about economic development by improving access to electricity via improved commercial availability and the use of renewable energy technologies.
Institutional Mechanism and Funds Flow
The Ministry of Finance and Planning oversees the project.
The Project Management Department of the Development Finance Corporation of
Ceylon (DFCC) functions as the project administrative unit (AU) and reports to the Ministry.
The project offers credit facilities through the IDA credit component for
grid-connected MHPs, SHSs and community-based VHPs.
The credit is disbursed to IPPs/ECSs/HHs through participating credit institutions
(PCIs)/micro finance institutions (MFIs).
Credit funds are disbursed to the PCIs by the Central Bank of Sri Lanka (CBSL). The GEF grant is used for project support and technical assistance activities and the
grant is directly disbursed by the CBSL to the respective beneficiaries.
When RERED was introduced, the GoSL began contributing 20 percent of the cost
for most of the project support activities, including project promotion, capacity
Implementing Strategy
Grid-connected MHPs
IPPs were allowed to set up projects up to 10 MW installed capacity.
PCIs were provided with re-finance facility.
The PCI was liable to repay the re-finance to the GoSL according to the agreed repayment terms.
PCIs conducted their own project appraisals, which included technical, financial and promoter evaluation.
Off-grid community based VHPs
VHPs are implemented and owned by community members mobilized in an Electricity Consumer Society (ECS).
VHPs were financed through a combination of loan and grant support.
ECSs negotiated their loans with lenders and agreed on terms including interest rates, loan amount, loan period, grace period and security.
Loan size depended on the sub-project cost and the repayment capacity of the ECS members.
Lending institutions evaluated household income and cohesiveness, and ECS managerial and technical capability when extending loans.
Implementing Strategy (Contd…)
Off-grid community based VHPs
Project preparation consultants (PPCs) provided technical assistance to ECSs with all tasks related to establishing VHPs, including design, construction and O&M. They also mediated between ECSs and other relevant stakeholders such as provincial councils, lending institutions and the AU.
A PPC was paid up to USD 8,000 as a Project Preparation Grant (PPG). The PPG is released in three stages: 40 percent upon successful design verification, 30 percent upon successful installation verification, and the final 30 percent six months after installation verification.
In addition, RERED provided PPCs with an incentive payment of up to USD
Implementing Strategy (Contd…)
Solar Home Systems (SHS)
A typical SHS sold under the project consisted of a 40-60 Wp solar photovoltaic (SPV) panel, five or six 12 volt direct current (DC) compact fluorescent lamps (CFL) and socket outlets for plugging in a DC television, a mobile phone charger or other appliances.
SHS vendors provide and install SHSs after evaluation of electricity needs
of potential household customers by the vendor’s technician.
In case a customer needs credit facilities, the technician performs
preliminary credit assessment and directs the customer to a microfinance institution (MFI). MFIs provide loans after detailed credit evaluation.
Legal Framework for Power Purchase
Grid-connected MHPs
ESD developed the standardized Small Power Purchase Agreement (SPPA) and the non-negotiable Small Power Purchase Tariff (SPPT).
Under the SPPA, IPPs enter into a 15-year agreement with the Ceylon Electricity Board (CEB), with clearly specified conditions of power delivery and purchase, with the floor tariff payable to the MHP subproject (the SPPT).
They also serve as a catalyst in attracting more financiers to the industry, reducing financial uncertainties for sub-projects.
Off-grid community based VHPs
During 1990, no entity other than the CEB was allowed to distribute and sell electricity.
The ECS concept was introduced to address this issue. ECSs generate power, but for use by ECS members only, which amounts to self-generation rather than commercial production and sale of power.
Impacts
Income and Livelihood Impacts
Saving on kerosene and other energy sources: Reduction of monthly household (HH)
kerosene consumption from 11 lit to 0.7 lit resulting in monetary saving of LKR 338 per HH.
Impacts (Contd…)
Social Impacts
According to a 2008 impact survey, children’s mean study time in households increased
from 1 Hr to 2.5 Hr per day.
60%-87% of the respondents, particularly women, stated that electricity provided security. Many VHP beneficiaries purchased TV and electric iron, exposure to TV has created a
positive impact on children by increasing awareness and knowledge.
Environmental Impacts
Estimates show that 41.2 million litres of kerosene have been saved by VHP- SHS powered HH as on 2008 thereby cutting down 14,719 tonnes of CO2.
Country: Norway
The Energy + International Partnership led by Norway, which aims to address energy access, energy efficiency and
renewable energy
What is Energy+
The Norwegian government launched the International Energy
and Climate Initiative
–
Energy+ in support of the UN Secretary
General’s SE4All initiative on 10 October 2011.
Energy + aims to increase access to modern energy and energy
efficiency, and reduce emissions of greenhouse gases in
developing countries.
Energy + intends to provide financial support to
developing
Energy + Guiding Principles
Sectoral approach:
Developing country actions in the energy
sector is supported through best-practice policy reforms, technical
support and at scale results-based financial investments to increase
access to renewable energy and energy efficiency, and reduce
greenhouse gas emissions.
Payment by results:
The Energy + partnership intends to provide
Who Initiated Energy+
The outlines of the concept was discussed with other donor countries, developing countries, private sector representatives, international
organizations and civil society organizations over a year-and-a-half before it was launched in October 2011.
The initiative is inspired by the Govt. of Norway’s past experience in international climate and forest initiative for reducing emissions from deforestation and forest degradation.
Current Status of Energy+
The Energy+ partnership is voluntary and open to all interested actors endorsing the guiding principles of Energy+.
Nearly fifty-five countries and organizations have signed up to the Energy+ Partnership. The partners are as follows.
Developing countries (e.g. Ethiopia, Kenya, Maldives, Senegal)
Developed countries (e.g. UK, Denmark, France, Norway)
UN agencies (UNDP, UNEP, UNIDO)
Multilateral development banks (World Bank, ADB, IDB, AfDB)
International organizations (e.g. IEA, OECD)
Private sector (WBCSD)
Think-tanks (e.g. CCAP)
How Developing Countries will be Benefited
Financial support from Energy+ will be based on achieved results in terms of increased access to sustainable energy and increased use of renewable
energy.
Financial support includes support to measures taken to establish policies and
regulations that bring about increased commercial investments in renewable energy and energy efficiency.
The support may be used by developing countries to further strengthen the enabling environment to attract commercial investments in the energy sector.
The Energy+ Partnership organizes dialogue with private sector (small,
Energy+ Guiding Principles (1/2)
Energy+ employs a three-phased approach to country engagement:
Phase one: Provide support for development of strategic plans (e.g. low-carbon and energy sector strategies), and policy and regulatory reforms, including support to capacity building.
Phase two: Provide support for implementation of required plans, policies and regulatory measures that provide incentives for commercial investments and for building necessary capabilities [including measurement, reporting and verification (MRV) mechanism] to enable the implementation of results oriented financing programs.
Energy+ Guiding Principles (2/2)
Use of
robust indicators
to measure outputs, outcomes and
impact. Reduction in emissions of greenhouse gases will be
quantified based on approved methodology and approaches
within the UNFCCC.
Activities will be
country-driven,
and will support developing
country partners’ energy and low carbon development and
poverty reduction strategies.
Work through
existing programs and institutions
will be
supported, thereby limiting transaction costs and speeding up
progress.
National and international
social and environmental standards
Energy + Outcomes (Kenya, Liberia and Bhutan)
Kenya:
Kenya and Norway entered into a five-year, NOK 250 million agreement to support
increased access to sustainable energy and reduce greenhouse gas emissions.
The initiative will seek to build over time an overall approach on RE and EE policy. Liberia:
Liberia and Norway entered into a five-year, NOK 100 million agreement to support
the development and implementation of a National Energy and Climate Plan.
Support will be provided for the necessary capacity-building as well as electrification
programs.
Bhutan:
In Bhutan, Norway entered into a five-year, NOK 100 million agreement to increase
Country: Republic of India
National Solar Mission (NSM)
NSM objectives
To achieve ecologically sustainable growth while addressing
energy security challenges.
To achieve volume production at a scale which leads to cost
reduction and rapid diffusion and deployment of solar
technologies across the country.
To set-up an enabling policy and regulatory environment for
NSM Targets
Sr
No
Application
Phase I
( 2010-2013)
Phase II
(2013-2017)
Phase III
(2017
–
2022)
1 Utility grid
power including roof top
1100 – 2000 MW
4000 – 10,000 MW
20,000 MW
2 Off-grid solar applications
200 MW 1000 MW 2000
MW
3 Solar Collectors 7 million sq. meters
15 million sq. meters
Regulatory Framework under NSM
Energy buy back arrangement
NTPC Vidyut Vyapar Nigam Limited (NVVN), a subsidiary of National Thermal Power
Corporation (NTPC) is designated as the nodal agency by the Ministry of Power (MoP) for entering into PPA for 25 yrs with solar developers who intend to set up projects up to
2013.
NVVN will buy solar power as per the Tariff fixed by the Central Electricity Regulatory
Commission (CERC).
NVVN to bundle equivalent MW capacity of thermal power allocated by MoP from
un-allocated quota of NTPC power stations and sell it to the utilities.
Utilities can meet their RPS obligation by purchasing power from NVVN.
Solar-specific RPO and REC
NVVN
Power Bundling Scheme
Institutional Arrangement to support bundling of Solar Power
State Government (Land, Water, Other Sanctions) Solar Power Developer Central Electricity Authority (Technical Support) National Thermal Power Corporation (NTPC)
NTPC Vidyut Vyapar Nigam (NVVN) Buys → Bundles →
Sells
State Electricity Boards
(Buyers of bundled power)
CERC
(Determines Tariff)
PPA Solar power S kWh @ US cents 25.56 (S kWh @ Rs 12/kWh)
Thermal power 4S kWh@ US cents 4.26 (4S kWh@ Rs 2.00 / kWh)
PPA Bundled Power/kWh @ ((S x 25.56 + 4S x 4.26)/5S) /kWh
Allocation of Solar Capacity under Phase I and
Phase II of NSM
Batch 1
Phase II
(2013-17)
Batch 2
(2011-12)
Batch 1
(2010-11)
Phase I
(2010-13)
1000 MW Solar PV and Solar thermal500 MW (Solar Thermal)
150 MW (Solar PV)
350 MW (Solar PV)
9000 MW
Solar Project Selection criteria under NSM
Short listing of the project investors based on
financial, technical competence, technical feasibility for grid connection and conformity with domestic content (solar modules and cells)
In case the shortlisted solar capacity is more than the allocated solar capacity under Batch 1 and 2, the bidders would be asked to submit RFP
indicating discount in Rs/kWh on CERC approved tariff
NSM Results
–
Capital Cost Reduction
2.45 2.33 1.61 1.29 0.00 0.50 1.00 1.50 2.00 2.50 3.002010-11 2011-12 2012-13 2013-14
B e n ch ma rk C o st ( M il li o n U S D p e r M W )
Trend of CERC Benchmark Cost for SPV
2.29 2.42
2.10 1.94 0.00 0.50 1.00 1.50 2.00 2.50 3.00
2010-11 2011-12 2012-13 2013-14
B e n ch ma rk C o st ( M il li o n U S D p e r M W )
NSM results - Solar Tariff Reduction
28.89 24.82 19.52 14.05 0 5 10 15 20 25 30 352010-11 2011-12 2012-13 2013-14
T a ri ff ( U S C e n ts p e r k W h
) CERC Benchmark Tariff Vs Tariff
Discovered for SPV
Benchmark Tariff 24.69 18.79 0 5 10 15 20 25 30
2010-11 2011-12 2012-13 2013-14
T a ri ff ( U S C e n ts p e r k W h )
CERC Benchmark Tariff Vs Tariff Discovered for CSP
NSM Results
(Installed Capacity)
STATE POLICY NSM
REC MECHANISM RPO
Key factors: NSM success
Government commitment from highest level.
Bundling of solar power with cheaper conventional power reduces the tariff impact of solar power on the distribution utilities.
Adoption of reverse bidding method for awarding project to qualified bidders
Implementing Renewable Purchase Obligation/REC mechanism for Solar Power.
Instituting a Payment Security Scheme through NVVNL.